Alpha intermediate shaft shifting question

[Crisco72]

Ok, I am pulling my hair out on this.
1983 Formula 23f 233 LS Mercruiser 260 with PRE-Alpha one serial # 5901870
I found this post and it seems to be the same problem I am having.

Possible part #52 issue.
BUT all of the links are broken, and I can't seem to figure out where this magic washer would go.
My intermediate shaft is really loose, and what started this is last time out the boat went into neutral. Engine off, lever forward the prop free spun. Same in reverse.
I pulled the drive over the weekend and found a few problems. First, the impeller was toast. The upper shaft seems to have too much play, and the intermediate shaft flops around and up and down.
I will post a video of the intermediate shaft and the play in the drive shaft.

 

[Crisco72]

Intermediate shaft play

 

[Crisco72]

Drive shaft slop

 

[Bt Doctur]

both videos are normal, the SS washer goes on the splined lower shaft . ,it prevents the brass shoe from dropping down too far

 

[Crisco72]

Ok. That washer is there.
As far as the shaft play, that's ok also?
If so I will go ahead and put everything back together this weekend.
Should I pressure test the drive? I found another thread where you use the metal lube fill fitting and a bike pump.

Is there anything else I should check while I have it apart?